Is Investor Enthusiasm For Risky Debt Worth It?
Emerging-market (“EM”) bonds, often considered the riskiest debt, have been exceptionally volatile since the onset of the COVID-19 pandemic. In March of 2020, prices dropped 16% in a matter of weeks, resulting in the worst monthly decline since 2008 as set forth by the Bloomberg Barclays EM USD Aggregate Total Return Index. After central banks stepped in to provide liquidity, EM bonds rebounded sharply in the second quarter of 2020. Year To Date for 2020, the total return for U.S. Dollar Denominated EM bonds rose 2.7% according to the J.P. Morgan Index for Emerging Market Debt.
The question remains though is why do investors seek risky debt? The answer obviously is to seek higher returns. The answer however is not in the pursuit of ever riskier debt. The answer is Bach Capital Management’s (“BCM”) UPPLIFT™ Investment Strategy. BCM is a Management Consulting/Asset Management Firm based in White Plains, New York and has created this investment strategy. UPPLIFT™ stands for Uncorrelated Principal-Protected Life Insurance For Tomorrow. It provides above market annual cash on cash dividends, tax deferred yields and principal protection.
UPPLIFT™ uses three (3) components, Life Insurance/Annuities, Treasury Management and Precious Metals With regard to the Life Insurance/Annuities used in the UPPLIFT™ Investment Strategy, BCM uses A-Rated Key Man Universal Life Insurance Policies as reflected in S&P and Best Ratings as well as Guaranteed Index Annuities Contracts from top-rated Annuity Companies. The yields resulting from the Life Insurance/Annuities component of the overall UPPLIFT™ Investment Strategy are totally uncorrelated to the S&P 500 benchmark.
The Treasury Management component is a long-only portfolio consisting of up to fifty (50) equities with a S&P Quarterly Option Index and weekly/monthly Equities Option Strategy coupled with an S&P Commodity Futures Strategy for hedging purposes. The investment objective for BCM’s Treasury Management component as part of the UPPLIFT™ is to produce cash dividends, tax deferred gains through long term capital appreciation with low correlation to the S&P 500 Index along with principal protection.
The Precious Metals component consists of a long only portfolio of precious metals equities as well as holding precious metals. The investment objective for BCM’s Precious Metals component is long term capital appreciation with low correlation to the S&P 500 Index along with protection from inflation and recessions. The level of investment in each of these components are in the sole discretion of management.
UPPLIFT™ can be structured to generate high yields for investors in the form of cash dividends, tax deferred yields and principal protection while at the same time providing risk mitigation/management strategies. Over the history of the UPPLIFT™, over 3.5+ years, our results have been superlative, far exceeding the S&P 500 index over the same period. The benefits of the UPPLIFT™ Investment Strategy when coupled with principal protection makes the UPPLIFT™ Investment Strategy unparalleled in today’s financial marketplace.
Please feel free to review our website at www.bachcapitalmanagement.com and contact us at [email protected] or call us at (914) 523-2318 to explore your specific needs and how you can incorporate the UPPLIFT™ into your overall investment strategy.
